What is Globalization?

Globalization is “…the inexorable integration of markets, nation-states and technologies to a degree never witnessed before — in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper and cheaper than ever before, and in a way that is enabling the world to reach into individuals, corporations, and nation-states farther, faster, cheaper than ever before.”

Thomas L. Friedman, The Lexus and the Olive Tree, p. 9

Globalization is a catchall word describing the transformative effects of various aspects of the world becoming more interconnected. It is often used to refer to the way liquidity of capital and the erasure of trade barriers has changed the nature of the world economy. It also refers to how these economic changes are driven by advances in technologies such as computers, the Internet, and manufacturing. It can be used to describe the cultural effects of worldwide mass media that is dominated by a handful of corporations, or used in talking about the shifts and changes in governments and social structures caused by changes in the world economy and technology.

“Accordingly,” as David Held and Anthony McGrew write, “globalization can be thought of as; a process (or set of processes) which embodies a transformation in the spatial organization of social relations and transactions — assessed in terms of their extensity, intensity, velocity and impact — generating transcontinental or interregional flows and networks of activity, interaction, and the exercises of power.”[i] Although there are a large number of individual aspects to globalization, it implies many levels of connection. We are living in Marshall McLuhan’s Global Village, and, like any village, we are getting to know each other better while simultaneously affecting each other’s lives more deeply.

This isn’t the first time we’ve gone through a phase of globalization. Historians point to the period of 1870 to 1914, which comprised the economic and industrial flowering of the Belle Époque in France and Belgium, the Victorian Period in England, and the Gilded Age in the United States. Cautionary critics point out that this earlier phase of globalization eventually led us into the First World War. While the similarities between today and the turn of the 19th century are significant, they can also be misleading. Much like today, there were striking advances in technology, such as the telephone, the automobile, and motion pictures, not to mention developments in automation and the creation of the modern assembly line. Also, like today, there was a vast increase in trade between nations and a proliferation of large corporations with extraordinary amounts of capital and power.

However, these similarities are only surface deep. The pace of technological change at the turn of the 19th century was rapid, but it was crawling at a snail’s pace in comparison to the rate of technological change we are currently experiencing. Moreover, the technologies we are creating today dwarf the power of anything we have previously envisioned and implemented.

In 1914, international companies still retained a degree of loyalty to their home nation. By contrast, today’s corporations are not simply powerful leviathans, they are, with ever fewer exceptions, truly transnational and far more concerned with their market values than with the interests of any particular nation. Moreover, the globalization of the Belle Époque can no more be credited with provoking the First World War than the isolationism of the 1920s and 1930s can be blamed in its entirety for resulting in the Second World War. Both were contributing, but not decisive, factors in helping to formulate an atmosphere conducive to conflict.

The situation today is extremely different. While war is ever more likely as globalization takes a firmer hold on the world, it is ever more unlikely to involve multiple Western nations, except when acting in concert against a common foe. The economic and political ties that bind mature democratic nations together make it far less advantageous for them to attempt to resolve their conflicts through force. On the other hand, the leaders of less-developed nations with little or no democracy, weak infrastructure, omnipresent corruption, and rampant poverty, often find violent conflict a way to distract impoverished populations from their tyranny, as well as a means to resolving differences.

The neo-liberal agenda that promotes the process of globalization we are currently following suggests that stronger economic ties reduce the likelihood of war. New York Times columnist Thomas Friedman refers to this as his Golden Arches Theory,[ii] by which no two nations that possess a McDonald’s have gone to war. This theory hasn’t held up entirely, as there are McDonalds in several countries that have been in conflict over the last two decades, from Serbia and Kosovo, to the Ukraine and Russia. However, by and large, it is an accurate platitude. He has even updated this to what he calls the Dell Theory, whereby countries that are part of a global supply chain are less likely to fight a war.[iii]

The point is that integrated economic prosperity can lead to less conflict with neighboring nations. However, that economic prosperity needs to reach a rather significant level to establish real security. The neo-liberal agenda of globalization seeks to increase economic stability and prosperity through international free trade. This tends to have both positive and negative effects. Naturally, those who are pushing this agenda (and profiting most heavily from it) tend to focus on the benefits. Not surprisingly, those who are critical of it tend to focus only on the negative aspects of globalization. Though it has existed since the beginning of the 1990s as a loose coalition of environmental groups, corporate watchdog organizations, and media critics, the anti-globalization movement first reached broad popular awareness with the protests against the World Trade Organization in Seattle in the fall of 1999. This event created a great deal of popular attention for the subject of globalization, granting both its proponents and detractors a wider audience, but few citizens seem to have grasped the implications of the arguments as they have played out over the ensuing years.

The truth of globalization, as always, lies somewhere between the extremes of the claims and criticisms of the ideologues on both sides of the issue. Globalization does have enormous benefits, but these are often slanted in the direction of those who are already reaping enormous advantage from the present economic system. Free trade can be helpful to developing an economy, but only if it is fair and balanced, giving all sides and all participants equal rewards. For example, the flight of manufacturing companies to less-developed nations in search of cheap labor has effects that are both positive and negative. Developed nations get cheaper goods, but fewer good manufacturing jobs. Developing nations get jobs, but not the social and economic benefits these jobs once provided to their counterparts in developed nations.

There is a wide gap of meaning between freedom and free trade. As Anthony Giddens writes in The Third Way and Its Critics, “The citizen is not the same as the consumer, and freedom is not to be equated with the freedom to buy and sell in the marketplace.”[iv] Globalization also has serious impacts on the environment, social structures, and cultures, but then so do economic and cultural isolationism. The Third Way, which Giddens is a strong advocate for, attempts to bridge this gap and push globalization in a slightly different direction by using various forms of regulation to cushion the effects of free market capitalism. While this is a rational compromise, it fails to address the root causes of the problems arising from globalization. Those who are promoting a Third Way for the global economy are still gripped by a Modern worldview. Giddens is right about citizenship, though, and this will be nowhere more obvious than in China.

The Chinese government is attempting to convince its population that they really want to be consumers, not citizens. They have every reason to believe this will work because they can see how willing American citizens have been to forego participation in government and leave behind all notions of a civil society as long as they could have fast food, shopping malls, and 500 channels of satellite TV. As the statistics on psychological depression in America indicate, this life of consumption and separation isn’t all it’s cracked up to be.[v] One has to wonder how long this situation will continue and whether countries like China will experience the same dissatisfaction with the consumer way of living as many Americans are beginning to feel.

To be specific, I am not against globalization in general, I am against the way we are proceeding to go about it, though by and large, it comes down to pretty much the same thing, as I disagree with our current path of “progress.” However, I don’t advocate a Third Way that cuts a poor compromise between two extremes, nor do I believe that some return to economic and cultural isolationism will solve any more problems than it creates. I believe we need to reconsider the way we envision the economy at the local, national, and global levels, taking into account the implications of technology, social structures, culture, and the environment at every level of our societies.

We need to begin viewing the global economy through the lenses of complexity and network theory. These schools of science look toward complex systems in nature, such as ecologies and networked systems like the Internet, to discern the fundamental rules governing highly interconnected structures, such as our local, national, and global economies. It is only by learning how our various, intermeshed, economic systems work that we can have any hope of consciously organizing them to benefit the whole of humanity. And to do this, we will not only need to understand how economies function on a financial level but also how politics, government, culture, the environment, and technology influence them. Failing to do this will likely lead to our failure in every other aspect of civilization. In the wake of the Great Recession of 2008, there are some who suggest that globalization may be on the wane — that the economic, political, and cultural connections between nations may be fraying as the result of the long standing effects of the global financial meltdown.[vi] While this may be true to some extent in the short term, rather than slowing, it is more likely that the pace of globalization will increase as the world economy recovers and grows in the coming decades.

[i] David Held and Anthony McGrew, The Global Transformations Reader, p. 55